The CAC 40 index slid 0.3% to close at 7,798 on Monday, following a pause in the previous session, weighed down by its heavyweight luxury sector as escalating Sino-EU trade tensions undermined revenue outlooks for China-exposed brands. Beijing’s threat to retaliate against the EU’s latest sanctions on two Chinese banks and five firms, the first time it has targeted its financial institutions over Russia-related measures since 2022, has stoked fears of reciprocal curbs on European luxury imports and potential tariff hikes on marquee names like LVMH (-0.8%) and Hermes (-1.6%). Meanwhile, trade talks between the US and European Union show no clear breakthrough yet, with both sides maintaining firm positions. Reports indicate the EU is preparing retaliatory tariffs should the US impose its planned 30% tariff on European imports starting August 1st.